100% Value Investors?

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BuglheadLuvsLondon
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100% Value Investors?

Post by BuglheadLuvsLondon »

Are there any members who are 100% value investors for the equity portion of their portfolio? If so, why?
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nisiprius
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Re: 100% Value Investors?

Post by nisiprius »

How could you even do a thing like that?

Even the the Invesco "S&P 500® Pure Value ETF," RPV is only 87% value:

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BuglheadLuvsLondon
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Re: 100% Value Investors?

Post by BuglheadLuvsLondon »

nisiprius wrote: Mon Feb 03, 2025 8:19 am How could you even do a thing like that?

Even the the Invesco "S&P 500® Pure Value ETF," RPV is only 87% value:
Yeah, something like that.
barberakb
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Re: 100% Value Investors?

Post by barberakb »

No and Im glad I am diversified. Value has sucked for me the last decade, at least comparing it to my other investments
jjj_22
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Re: 100% Value Investors?

Post by jjj_22 »

I haven’t seen any around here, but if you check out the rational reminder community I think there are some.
secondopinion
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Re: 100% Value Investors?

Post by secondopinion »

BuglheadLuvsLondon wrote: Mon Feb 03, 2025 7:27 am Are there any members who are 100% value investors for the equity portion of their portfolio? If so, why?
I am not a purist in any sense. I find that the safer stocks tend to be slightly value-tilted; since I am risk-averse, I favor such tilts.
Passive investing: not about making big bucks but making profits. Active investing: not about beating the market but meeting goals. Speculation: not about timing the market but taking profitable risks.
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KEotSK66
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Re: 100% Value Investors?

Post by KEotSK66 »

I have a big value tilt, ~ 85% of stocks currently.

But I cheat, much of my value exposure is via slow-growing dividend stocks in VWIAX. In my book that's cheating because value investing is really about assuming the risks others are avoiding. Too bad I have to secure retirement income.

So I recently fig-leafed my cheating by getting into DODBX, getting back to my roots as a deep value investor.

I see many threads about value and factor investing. I'm lazy about researching funds which I don't own so I may be wrong but I suspect the spottiness BHs experience with value and factors is a result of formulaic methodologies, you need humans managing such funds.
Last edited by KEotSK66 on Tue Feb 04, 2025 9:40 am, edited 2 times in total.
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Lawyered_
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Re: 100% Value Investors?

Post by Lawyered_ »

You will find some. One simply 100% value play is 100% AVGV and chill.
“The stock market is a device to transfer money from the impatient to the patient.”
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Re: 100% Value Investors?

Post by secondopinion »

KEotSK66 wrote: Tue Feb 04, 2025 8:43 am I have a big value tilt, ~ 85% of stocks currently.

But I cheat, much of my value exposure is via slow-growing dividend stocks in VWIAX. In my book that's cheating because value investing is really about assuming the risks others are avoiding. Too bad I have to secure retirement income.

So I recently fig-leafed my cheating by getting into DODBX, getting back to my roots as a deep value investor.

I see many threads about value and factor investing. I'm lazy about researching funds which I don't own so I may be wrong but I suspect the spottiness BHs experience with value and factors is a result of formulaic methodologies, you need humans managing such funds.
As far as I see, the performance of CRSP has been satisfactory. S&P 500/400/600 have been good picks as well. You are more likely to get a poor experience trying to find a good manager than having maybe not the most pure of value tilt; and these managed funds take more risks to achieve the returns.

Value just underperformed for a long while. I am not worried about it because I stayed in the safer portion of muted value. I will not change my mind because it is truly lower risk for lesser reward (the reward was not bad either). I will let the more adventurous people seek the risky portions of the market.
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Valuethinker
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Re: 100% Value Investors?

Post by Valuethinker »

nisiprius wrote: Mon Feb 03, 2025 8:19 am How could you even do a thing like that?

Even the the Invesco "S&P 500® Pure Value ETF," RPV is only 87% value:

Source

Image
Thank you for showing this.

The list of companies is impressively bad. For example the 2 big motor stocks - Ford and GM. Each of which might not be around in 10 years time in their current form. Citigroup. etc.

It's a portfolio full of stinkers. Therein lies the opportunity, because if the company either does an LBO and goes private, or someone comes along who decides to break up the company and distribute proceeds to shareholders, then these things could be worth 2x current market value.
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Invest Quietly
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Re: 100% Value Investors?

Post by Invest Quietly »

The idea of 100% in ANY one asset class makes me cringe a little. That being said, you'll find a decent number of value tilters here (I'm one of them), but not many appear to bet the farm on it. As jjj_22 noted, the Rational Reminder forum has many investors with very strong value allocations. However, even they usually have exposure to other elements of the market through 'factors' like profitability and momentum.
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Re: 100% Value Investors?

Post by Morse Code »

Lawyered_ wrote: Tue Feb 04, 2025 9:12 am You will find some. One simply 100% value play is 100% AVGV and chill.
Here. Well, not quite. About 90% of my portfolio is AVGV.
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Lawyered_
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Re: 100% Value Investors?

Post by Lawyered_ »

Morse Code wrote: Wed Feb 05, 2025 8:26 am
Lawyered_ wrote: Tue Feb 04, 2025 9:12 am You will find some. One simply 100% value play is 100% AVGV and chill.
Here. Well, not quite. About 90% of my portfolio is AVGV.
90% AVGV; 10% EDV or GOVZ, rebalanced annually seems like the appropriate play for that portfolio.
“The stock market is a device to transfer money from the impatient to the patient.”
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KEotSK66
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Re: 100% Value Investors?

Post by KEotSK66 »

secondopinion wrote: Tue Feb 04, 2025 10:31 am As far as I see, the performance of CRSP has been satisfactory. S&P 500/400/600 have been good picks as well.
What do the 500/400/600 have to do with value?
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Curb Fan
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Re: 100% Value Investors?

Post by Curb Fan »

The equity portion of my 403B is value-based, though there are some growth companies included in the funds.

My portfolio is divided between Dodge & Cox's US equity (Large and some Medium cap), Dodge & Cox's International equity (Large and some medium), DFA's US Small Cap Value, and DFA's International Small Company (value leaning but partly a blend). I balance this with nearly 30% in TIAA Traditional RC. My view is that I can take a little calculated risk as a tenured professor but I also realize that my plan has a good chance of losing out to the broader US and Int'l indexes. However, I don't think I'll lose or win by much in the end, so I'm comfortable with this plan and will be holding it for at least 25 years. I wouldn't recommend this for most people. It took me a decade+ of reading and investing to become comfortable with it and to understand my own risk tolerance.
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Re: 100% Value Investors?

Post by asif408 »

75% of the stock funds I own are value funds (I consider this a heavy value tilt), but even with that only about 1/2 of my total stock allocation is tilted to value when you look at, say, Morningstar X-ray. The rest is a mix of blend and growth. Even if I owned all value funds, I'd still probably have 30-40% in blend and growth.

So unlikely there are any 100% value investors, seems like 60-70% would be the max if you owned all value funds.
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Re: 100% Value Investors?

Post by secondopinion »

KEotSK66 wrote: Wed Feb 05, 2025 11:24 am
secondopinion wrote: Tue Feb 04, 2025 10:31 am As far as I see, the performance of CRSP has been satisfactory. S&P 500/400/600 have been good picks as well.
What do the 500/400/600 have to do with value?
The value indexes of these that is.
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Re: 100% Value Investors?

Post by hnd »

an advisor friend said that he is helping a widow with her husband DIY portfolio. They used an advisor until the stock crash of 2008 and the guy was certain he knew better. He went 100% value as much as you possible can. bought like yachtman funds and equity income funds and some stocks.

They said the good news for her was that it wasn't all that terrible. compared to a better equity portfolio, he would of gotten trounced. However, he was 90% value stocks and 10% cash. compared to a 60/40 or 70/30 it actually faired well (with more risk).
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Re: 100% Value Investors?

Post by KEotSK66 »

You are more likely to get a poor experience trying to find a good manager...That's the usual BH propaganda against active funds.

...and these managed funds take more risks to achieve the returns. Isn't that what deep value is all about? I'm not interested in temporary mispricings because of broad market sell-offs, that's buying low which isn't a bad thing but it's not going to get you in on the ground floor prior to the earnings/fundamentals reversal.

I'm not sure if all value index funds are cap-weighted so this may not be true or not true in some cases...Cap-weighting restricts how much money can be invested in the smaller companies in the index.
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Re: 100% Value Investors?

Post by BitTooAggressive »

BuglheadLuvsLondon wrote: Mon Feb 03, 2025 7:27 am Are there any members who are 100% value investors for the equity portion of their portfolio? If so, why?
I have a value tilt but trying to be 100% value would be reckless IMO. Nobody knows the future.
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Re: 100% Value Investors?

Post by Nathan Drake »

BitTooAggressive wrote: Fri Feb 07, 2025 5:17 am
BuglheadLuvsLondon wrote: Mon Feb 03, 2025 7:27 am Are there any members who are 100% value investors for the equity portion of their portfolio? If so, why?
I have a value tilt but trying to be 100% value would be reckless IMO. Nobody knows the future.
Long term returns show it's not reckless at all. I'm more than 60% SCV at this point, and it's highly diversified and the funds have strong long term performance.

This isn't like gambling on individual stocks or crypto.
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Re: 100% Value Investors?

Post by BitTooAggressive »

Nathan Drake wrote: Fri Feb 07, 2025 12:09 pm
BitTooAggressive wrote: Fri Feb 07, 2025 5:17 am

I have a value tilt but trying to be 100% value would be reckless IMO. Nobody knows the future.
Long term returns show it's not reckless at all. I'm more than 60% SCV at this point, and it's highly diversified and the funds have strong long term performance.

This isn't like gambling on individual stocks or crypto.
No but it’s too risky for me. It’s diversified as far as companies but if SCV underperforms it’s a big bet you are taking. On my equities I am about 24% SCV split between US and international developed. That’s all I am comfortable with. I can’t imagine 60%.
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Re: 100% Value Investors?

Post by Nathan Drake »

BitTooAggressive wrote: Fri Feb 07, 2025 12:23 pm
Nathan Drake wrote: Fri Feb 07, 2025 12:09 pm

Long term returns show it's not reckless at all. I'm more than 60% SCV at this point, and it's highly diversified and the funds have strong long term performance.

This isn't like gambling on individual stocks or crypto.
No but it’s too risky for me. It’s diversified as far as companies but if SCV underperforms it’s a big bet you are taking. On my equities I am about 24% SCV split between US and international developed. That’s all I am comfortable with. I can’t imagine 60%.
Value funds mostly have beta exposure. Instead of 15% volatility it’s closer to 20%.

It’s not as big of a bet as you make it seem, I’d be far more concerned if I were 100% US TSM but that’s seen as just fine by many
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Re: 100% Value Investors?

Post by nisiprius »

Lawyered_ wrote: Tue Feb 04, 2025 9:12 am You will find some. One simply 100% value play is 100% AVGV and chill.
AVGV is only 18%+15%+17% = 50% value.

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Re: 100% Value Investors?

Post by Gaston »

nisiprius wrote: Fri Feb 07, 2025 2:30 pm AVGV is only 18%+15%+17% = 50% value.

Image
As discussed elsewhere on this forum, Morningstar changed its style box methodology in 2024. The new methodology seemed to shift blend and growth dollars leftward on the grid, making the value box far less value-y. For those wishing to invest in value, IMHO it is worth understanding how a specific fund or ETF measures value. Chances are, it will deviate from the Morningstar grid.

Here is a reminder of the approach that Morningstar adopted last year: https://www.morningstar.com/whats-new/u ... ethodology
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Re: 100% Value Investors?

Post by Parkinglotracer »

I have 15% of my portfolio in vanguard value etf (VTV) along with VTI (total index)

Since inception they both have returned about 8.8 to 8.9% overall or 7.4 to 7.6% after taxes / sake.

https://investor.vanguard.com/tools-cal ... er=vtv,vti
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Re: 100% Value Investors?

Post by KEotSK66 »

Gaston wrote: Fri Feb 07, 2025 2:54 pm For those wishing to invest in value, IMHO it is worth understanding how a specific fund or ETF measures value.
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Re: 100% Value Investors?

Post by the_wiki »

nisiprius wrote: Fri Feb 07, 2025 2:30 pm
Lawyered_ wrote: Tue Feb 04, 2025 9:12 am You will find some. One simply 100% value play is 100% AVGV and chill.
AVGV is only 18%+15%+17% = 50% value.

Image
As measured by Morningstar. However, Avantis feels all the stocks in this fund are value stocks.
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